The significance of differing resource characteristics

The primary reason why economists distinguish between non-renewable, renewable

and environmental resources is that the overall management challenge of each differs. The

primary question for non-renewable resource management is: “at what rate should a resource

of fixed supply be depleted?”. By contrast, the main consideration in managing renewable

resources is that they have the potential to be inexhaustible. The primary question then

becomes: “what balance should be maintained between the rate of use and the rate of

resource regeneration?”. Whilst the primary question in managing environmental resources

becomes “what are the costs to society of diminished ecosystem functions as a result of

renewable and/or non-renewable resource depletion?” or, alternatively, “what are the

benefits to society of enhanced ecosystem functions as a result of renewable and/or non-

renewable resource increase or enrichment?”.